{"id":91693,"date":"2024-08-06T01:34:44","date_gmt":"2024-08-06T05:34:44","guid":{"rendered":"https:\/\/ifintechworld.com\/?p=91693"},"modified":"2024-08-06T01:34:48","modified_gmt":"2024-08-06T05:34:48","slug":"dividend-printer-cboe-capitalizing-on-market-turmoil","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=91693","title":{"rendered":"Dividend Printer CBOE: Capitalizing On Market Turmoil"},"content":{"rendered":"
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Introduction<\/h2>\n

While I am writing this, markets are panicking.<\/p>\n

Volatility, as measured by the CBOE Volatility Index, has spiked to more than 40, the highest number since 2020, when the world was hit by bad news from Wuhan, China (pandemic).<\/p>\n

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Bloomberg<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

This is the result of a number of headwinds, including poor economic growth in the United States, an unwinding carry trade that involves the Japanese yen, geopolitical uncertainty, and the fact that tech stocks are still trading at a lofty valuation.<\/p>\n

I added emphasis to the quote below:<\/p>\n

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Markets are extending last week’s retreat, when a weak US jobs report ignited fears that the Fed isn’t moving fast enough to prevent a sharp economic downturn. The wave of selling hit a fever pitch in Japan as traders rushed to unwind popular carry trades<\/strong>, powering a 3% surge in the yen and causing the Topix stock index to shed 12% and close the day with the biggest three-day drop in data stretching back to 1959.<\/span><\/em><\/p>\n

The key point is the current shift in narrative, from no landing to soft landing<\/strong>,” said Florian Ielpo, the head of macro research at Lombard Odier Asset Management. “That risk was poorly priced and investors shifting gears fast explains the extent of the move<\/strong>.” – Bloomberg<\/em><\/p>\n<\/blockquote>\n

With that said, for some companies, higher volatility is a blessing. One of these companies is Cboe Global Markets (BATS:CBOE<\/span>)<\/strong>, a company I called “One Of The Best Compounders In Finance<\/em>” in my March 10 article.<\/p>\n

Since then, shares have returned 4.6%, which is in line with the return of the S&P 500.<\/p>\n

In this article, I’ll update my thesis on the company behind the CBOE VIX index and explain why I continue to believe it’s one of the best dividend growth stocks in the market – not just in finance.<\/p>\n

So, let’s dive into the details!<\/p>\n

What’s Cboe?<\/h2>\n

Did I ever mention I love stock exchanges?<\/p>\n

That’s a rhetorical question, as I have covered two of Cboe’s biggest peers in recent weeks in very bullish articles (here and here).<\/p>\n

A few years ago, a very wealthy fund manager said that owning Cboe (and its peers) is like owning a money printer. Whenever someone places a trade on one of its exchanges, shareholders make money.<\/p>\n

The higher the volatility, the better.<\/p>\n

Founded in 1937, Chicago-based Cboe owns the Chicago Board Options Exchange and the exchange operator BATS Global Markets.<\/p>\n

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Cboe Global Markets<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Here’s a list of the company’s biggest operations – based on its 10-K:<\/p>\n